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Following World War I, local developer Joseph Laronge, who had previously opened the Stillman movie house on East 12th street, envisioned a row of theaters on Euclid Avenue between East 14th and East 17th streets. Laronge and New York City business magnate Marcus Loew, among others, founded a partnership called Loew’s Ohio Theatres to develop the area.[5]

The organization’s first two theaters, the Ohio and State, were designed by eminent architect Thomas W. Lamb in the Italianate style. It was considered essential for the theaters' marquees to face Euclid Avenue, but because of space constraints the State Theatre was built at the back of the lot, although its lobby shares the Euclid frontage with the Ohio Theatre.[5] Construction began in 1920, and the pair opened in early February 1921.[6]

Across Euclid Avenue, Charles A. Platt's Hanna Theatre, part of the Hanna Building complex, opened in late March 1921. Although the theater faces East 14th Street, it is still part of Playhouse Square. It was named for the prominent Cleveland Senator Mark Hanna.[5]

Meanwhile, the Bulkley Building housing the C. Howard Crane-designed Allen Theatre was being built next door. Completed in early April 1921, Jules and Jay Allen's Pompeiian-style theater was sold to Loew's in 1922.[5]

The last theater to be constructed was the Connor Palace,[7][8] formerly known as the Palace Theatre, opening in November 1922 in the Keith Building, which at the time was the tallest in Cleveland.[5] Designed by the Chicago architectural firm of Rapp and Rapp, the Connor Palace was a regional flagship of the Keith-Albee chain of vaudeville theaters.[9]

The area surrounding the theaters soon became known unofficially as “Playhouse Square.” The Euclid Square Association, a civic group, tried to rename the district “Euclid Square,” although these efforts were ultimately unsuccessful.[10] The area is now officially designated as "Playhouse Square."

The theaters successfully showed a variety of serious theater, vaudeville shows, and movies for more than forty years. However, during the years following World War II, suburbanization and the rise of television led to the decline of the theaters.[11] Fire broke out in the Ohio in 1964, and the other Playhouse Square theaters were struck by vandalism.[5] Between May 1968 and July 1969, all the theaters closed except the Hanna.[12]

Part of James Daugherty's The Spirit of Drama – Europe, one of four murals in the lobby of the State Theater

Plans to reopen and restore the theaters began almost immediately. In 1970, Raymond K. Shepardson, a Cleveland Public Schools employee, formed a non-profit group named the “Playhouse Square Association” with the Junior League of Cleveland, Inc.[6] The cover of the February 27, 1970 issue of Life was a two-page pull-out of James H. Daugherty's The Spirit of Cinema America, a mural in the State Theatre's lobby.[5][13]

Plans to raze the Ohio and the State Theatres in 1972 and 1977 caused a public outcry, and in 1973 the newly formed Playhouse Square Foundation obtained long-term leases for the Connor Palace (known then as the Palace Theatre)[8] and Ohio and State Theatres, while Cuyahoga County commissioners purchased the Loews Building.[6] Also in 1973, the musical revue Jacques Brel is Alive and Well and Living in Paris opened in the State Theatre lobby. Expected to run two weeks, the show instead played for two and a half years.[14] In 1978, Playhouse Square was added to the National Register of Historic Places.[5]

Emboldened by the unprecedented success of Jacques Brel, restoration of the theaters began in earnest. Various public-private partnerships collected some $40 million for the project.[15]

Because of extensive fire damage, the Ohio Theatre was originally intended to be the last of the theaters to undergo renovation, but those plans were accelerated so that the theater could become the home of the Great Lakes Shakespeare Festival, now Great Lakes Theater. The $4 million project was begun at the end of 1981 and completed in less than nine months. Work began on the State Theatre in May 1979, and was completed in the summer of 1984, after the addition of a new $7 million stagehouse. Renovation of the theater's three lobbies was completed in 1987. Restoration of the Connor Palace[7][8] began in 1987, and was finished the following year. As part of the project, expanded parking facilities were added to the complex.

Reconstruction of the Allen Theatre lagged behind the rest, partly because some felt that three theaters were enough for the district. However, in 1993 the Playhouse Square Foundation agreed to rent the theater with the intention of purchasing it, which it did in 1997. This acquisition made Playhouse Square the largest performing arts complex outside of New York in the United States, with more than 10,000 seats.[5] The Allen re-opened in 1998.[16]

Although the Hanna Theatre was the only one of the group not to close in 1968 or 1969, it was overshadowed by the revitalization of the Euclid Avenue theaters during the 1980s, and closed in 1989. However, the Hanna reopened in March 1996 – the 75th anniversary of its original opening.[17] In 1999, the Playhouse Square Foundation acquired the Hanna, making it the fifth and last of the original theaters to be purchased by the foundation.[18]

The Cleveland Theater District Development Corporation (CTDDC), now the Playhouse Square District Development Corporation (PDDC), was established in 1998 as a business improvement district to foster development in the theater district.[19][20][21]

The reopening of the State and Ohio Theatres and Connor Palace encouraged further development at Playhouse Square, including the $40 million Renaissance Office Building and a Wyndham Hotel.

In an unprecedented move for a not-for-profit performing arts center, Playhouse Square established a Real Estate Services Division in 1999 to support the organization’s arts operations. Playhouse Square is active in area development in order to give visitors a lively, welcoming and entertaining destination, while also creating a neighborhood with a robust business environment.

In 2002, Playhouse Square opened the 14th Street Theatre as a home for Second City Cleveland and a venue for improvisational comedy, musical comedy and avant-garde fare, often for extended runs. The venue was closed in 2013 and transformed into the private dining space Cibreo Privato, part of the Italian restaurant Cibreo operated by Driftwood Restaurant Group.[22][23]

Playhouse Square and Cleveland's public broadcasting stations conducted a joint capital campaign to transform the One Playhouse Square Building into the Idea Center at Playhouse Square. Opened in 2005, it is now the home for Playhouse Square's community engagement and education programs and the downtown headquarters for Cleveland radio stations WCPN and WCLV, as well as TV station WVIZ, incorporated together as ideastream.[24]

Also in 2008, the Hanna Theatre underwent a thorough renovation with improvements to its stage including a new hydraulic lift system. The Hanna is now home to Great Lakes Theater, Cleveland's classic theater company which previously performed at the Ohio Theatre.

Through a collaboration called “The Power of Three,” Cleveland Play House, Cleveland State University and Playhouse Square partnered to create the Allen Theatre Complex, featuring a reconfigured Allen Theatre (re-opened 2011) and two new theaters that opened in 2012. Cleveland Play House and Cleveland State University's Department of Theatre and Dance are now resident companies at Playhouse Square. The Cleveland Play House administrative offices and all of Cleveland State University's arts programs are now located in the Middough Building on Playhouse Square's campus, adding to the vibrancy of the neighborhood.

Playhouse Square welcomes more than 1 million guests to 1,000+ performances and events each year. Its Broadway Series season ticket holder base (more than 29,000) is one of the largest in the country, making Cleveland one of fewer than 10 markets that can support a two-week run of a touring Broadway show.[25]

Improvements to the Playhouse Square neighborhood - including a digital signage network, upgrades to U.S. Bank Plaza, a retro signage feature and the GE Chandelier, the world's largest outdoor chandelier, located above the intersection of Euclid Avenue and East 14th Street - were completed between April 2013 and April 2014, culminating in a ceremony on May 2, 2014 entitled "Dazzle the District."[26][27][28]